(Bloomberg) -- US Treasuries extended losses and stock futures remained down as investors considered how a better-than-expected US jobs report might impact the pace of Federal Reserve policy tightening. Futures were hit earlier on a report Tesla Inc. Chief Executive Officer Elon Musk said the electric carmaker needs to cut staff amid a gloomy economic outlook.
Contracts on the S&P 500 fell 0.8% while those on the Nasdaq 100, where Musk’s company is among the largest index components, were lower by 1.3%. Shares of Tesla slid more than 4% in premarket trading. Europe’s Stoxx 600 benchmark struggled to hold on to gains, with volumes reduced by UK holidays marking the Queen’s Jubilee.
A Bloomberg gauge of the dollar rose 0.3% after overnight losses, while the yen held near the psychologically important 130 level against the greenback. Benchmark Treasury yields rose to 2.96%.
Investors remain on edge as some fear the pace of US monetary tightening could throw the world’s largest economy into a recession. US May nonfarm payrolls rose 390,000 compared to estimates of 318,000, according to a Bloomberg survey of economists. Meanwhile, the unemployment rate remained unchanged at 3.6% in the month, versus expectations of 3.5%.
“Investors remain nervous, trying to collect more information about earnings prospects on one side and economic data on the other,” said Cedric Ozazman, head of investment solutions at Mirabaud & Cie SA in Geneva. “The jobs report will be crucial.”
Among individual stock moves, electric-vehicle shares dropped in New York premarket trading following the Tesla report, with Nikola Corp. and Rivian Automotive Inc. lower. Tesla’s Musk said the electric carmaker needs to cut staff by around 10%, noting he had a “super bad feeling” about the economy, according to an internal email seen by Reuters.
Elsewhere, Lululemon Athletica Inc. climbed after the athletic-wear retailer’s results surpassed analyst’s expectations and software company Okta Inc. rallied after its earnings.
How will markets be affected by the Fed’s quantitative tightening? QT officially starts Wednesday and is the theme of this week’s MLIV Pulse survey. Click here to participate anonymously.
Here are some key events to watch this week:
- US May employment report Friday
- The UN’s Food and Agriculture Organization releases its monthly food price index at a time of maximum concern about global supplies on Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.8% as of 8:38 a.m. New York time
- Futures on the Nasdaq 100 fell 1.3%
- Futures on the Dow Jones Industrial Average fell 0.5%
- The Stoxx Europe 600 was little changed
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro fell 0.3% to $1.0716
- The British pound fell 0.3% to $1.2534
- The Japanese yen fell 0.5% to 130.48 per dollar
Bonds
- The yield on 10-year Treasuries advanced five basis points to 2.96%
- Germany’s 10-year yield advanced four basis points to 1.28%
Commodities
- West Texas Intermediate crude rose 0.3% to $117.27 a barrel
- Gold futures fell 0.5% to $1,862 an ounce
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